New Highs Expand in the Healthcare Sector

New highs are a sign of underlying strength and chartists can measure this indicator using High-Low Percent. In particular, I like to rank the nine sectors by High-Low Percent or a moving average of High-Low Percent. Note that High-Low Percent equals new highs less new lows divided by total issues. Chartists looking for the weekly leaders in High-Low Percent can look at the 5-day SMA. The table below shows the technology, healthcare and industrials sectors with readings above +6%. As a percentage of component stocks, these three sectors saw the most new highs last week. Consumer discretionary and energy were the weakest because the 5-day SMA of High-Low Percent was below 1%.

The chart below shows the High-Low Percent indicators as histograms and the sectors are sorted by the 5-day SMA of High-Low Percent. This SMA is not shown on the charts, but I am showing the value for each sector. Tech is leading because the 5-day SMA of XLK High-Low% ($XLKHLP) is at +6.4%. Healthcare High-Low% ($XLVHLP) hit 13.33% on Wednesday and this was the highest reading since August 1st. Consumer discretionary is clearly the weakest sector for internal metrics because High-Low Percent was negative three of the last five days.

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Thanks for tuning in and have a good weekend!
--Arthur Hill CMT

About the author:Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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